Impact of EU Transport & Infrastructure Policies on European Polycentricity

1. ESPON 2.1.1 Territorial Impact of EU Transport and TEN Policies Nils Schneekloth, University of Kiel ESPON seminar October 11, 2004 Nijmegen, the Netherlands

2. Structure of the TIA • Analysis of impacts of transport policies with two economic models • CGEurope (Spatial CGE model of transport flows with monopolistic competition) • SASI (quasi-production function model of accessibility) • Impacts per NUTS-3 region • Comparison of „with“ and „without“ for 13 scenarios in the Final Report: • Change of accessibility • Change of GDP per capita • Equivalent variation of income

3. Time horizon Policy type Scenario characteristics Retrospective 1991-2001 Reference A0 Do-nothing Infrastructure A1 Only rail projects A2 Only road projects A3 Rail and road projects Prospective 2001-2021 Reference 00 Do-nothing Infrastructure B1 Priority projects (new list) B2 TEN/TINA projects B3 TEN/TINA projects except cross-border corridors B4 TEN/TINA cross-border corridor projects only B5 TEN/TINA projects only in Objective 1 regions Pricing C1 Reduction of the price of rail transport C2 Increase of the price of road transport C3 Social marginal cost pricing of all modes Combination D1 Priority projects plus SMCP (B1+C3) D2 TEN/TINA projects plus SMCP (B2+C3) Summary of transport policy scenarios

6. Scenario B1: Distributive effects of the implementation of the TEN priority projects (SASI)

7. Scenario B1: Implementation of the TEN priority projects (CGEurope)

8. Scenario B2: Implementation of TEN and TINA projects (SASI)

9. Scenario B4: TEN/TINA, cross-border projects only (CGEurope)

10. Scenario B5: TEN/TINA, objective-1 regions projects only (CGEurope)

11. Scenario C3: Pricing of all modes of transport (CGEurope)

12. Scenario Accessibility cohesion effects (+/–) CoV Gini G/A RC AC A1 Only rail projects 1991-2001 + + · + –– A2 Only road projects 1991-2001 + + + + – A3 Rail and road projects 1991-2001 + + + + –– B1 Priority projects + + ++ ++ – B2 All TEN/TINA projects ++ ++ ++ ++ – B3 TEN/TINA except cross-border corridors ++ ++ ++ ++ – B4 TEN/TINA only cross-border corridors + + + + – B5 TEN/TINA only in Objective 1 regions + + + + – C1 Reduction of price of rail transport + + + ++ –– C2 Increase of price of road transport – – – –– ++ C3 SMCP of all modes – – –– –– ++ D1 B1+C3 + + + + ++ D2 B2+C3 + + ++ + + SASI model: Accessibility cohesion effects in EU27+2 +/++ Weak/strong cohesion effect: disparities reduced CoV Coefficient of variation (%) –/–– Weak/strong anti-cohesion effect: disparities increased Gini Gini coefficient (%) · Little or no cohesion effect G/A Geometric/arithmetic mean RC Correlation relative change v. level AC Correlation absolute change v. level

13. Scenario GDP/capita cohesion effects (+/–) CoV Gini G/A RC AC A1 Only rail projects 1991-2001 – – · – –– A2 Only road projects 1991-2001 – – · – –– A3 Rail and road projects 1991-2001 – – · – –– B1 Priority projects + + · – –– B2 All TEN/TINA projects + + · + –– B3 TEN/TINA except cross-border corridors + + · + –– B4 TEN/TINA only cross-border corridors + + · + –– B5 TEN/TINA only in Objective 1 regions + + + + – C1 Reduction of price of rail transport – – · – –– C2 Increase of price of road transport + + · + ++ C3 SMCP of all modes + + · + ++ D1 B1+C3 + + · · · D2 B2+C3 + + + + –– SASI model: GDP/capita cohesion effects in EU27+2 +/++ Weak/strong cohesion effect: disparities reduced CoV Coefficient of variation (%) –/–– Weak/strong anti-cohesion effect: disparities increased Gini Gini coefficient (%) · Little or no cohesion effect G/A Geometric/arithmetic mean RC Correlation relative change v. level AC Correlation absolute change v. level

14. Polycentricity impacts • Methodology presented in FR of 1.1.1 applied to transport scenarios • Score measure containing sub-indices of size, location and connectivity applied at national scales • Calculation for the reference scenario and all transport scenarios • Evaluation for all transport scenarios, if national polycentric structure is improved or if it declines

15. Development of polycentricity of national urban systems in the old EU member states 1981-2021

16. Development of polycentricity of national urban systems in the accession countries 1981-2021

17. Conclusions on polycentricity impacts • The polycentricity of the European urban system has increased in the past and is likely to continue to increase in the future as large cities in the accession countries catch up with cities in western Europe. • However, polycentricity of the European urban system will mainly grow in the accession countries, whereas it will decline in western Europe because of the continued growth of the largest cities. • Polycentricity of national urban systems in Europe has declined in the past and is like to continue to decline in the future. • All transport infrastructure policies examined accelerate the decline in polycentricity of national urban systems because they tend to be directed at primarily connecting large urban centres. • Transport pricing scenarios which make transport less expensive have the same effect as infrastructure improvements. • Transport pricing scenarios which make transport more expensive in general strengthen the polycentricity of national urban systems.

18. Impact of scenarios on connectedness of FUAs

20. ICT policy impact • Scenarios based on hypotheses on regional distribution of EU ICTs investments • among regions • lagging vs advanced • among ICTs policies suggested by eEurope 2002 (DG Information society) • accessibility • internet connections • high-tech employment • 2% of average annual ICTs investments in 15 EU member states • Estimate of marginal efficiency of investments in accessibility, internet connections and high-tech employment • Forecast of pc GDP average annual growth rate in 20 years with STIMA model

21. Scenario A: pc GDP average annual growth rate (STIMA)

22. Scenario B: pc GDP average annual growth rate (STIMA)

23. Scenario C: pc GDP average annual growth rate (STIMA)

24. Typology of regions by ICTs policies impact

25. Issues and risks in the horizontal co-ordination of transport policy • Improving the accessibility of lagging regions leads towards equalisation of competitiveness and mobility, but especially by less sustainable modes • Failure to implement the complete package leads to danger to reduce the positive benefits and increase negative consequences • Improving accessibility has the risk that remote and rural regions are insufficiently competitive to withstand competition • Risk of out-migration of potential labour force from less competitive regions, when transport costs to central regions are reduced • Pressure on structural policies to complement transport policies to support firms in disadvantaged sectors and regions

26. Issues and risks in the vertical co-ordination of transport policy • Impact of policy depends critically on how member states enact legislation to affect given EU policy objectives • Different intensities in use of EU policy in formulating national priorities • EU-15: little direct use of EU policy to formulate policy goals, but use of similar concepts with respect to environment, cohesion and regional impacts • Accession countries: strong emphasis on TENs and EU priorities in formulation of policies • National policies clearly address only national cohesion issues • Differing policy interests in implementing projects in geographically adjacent countries can lead to potential conflicts in cohesion and environmental goals

27. Recommendations on the co-ordination of transport policy • Conflicts between national and EU cohesion goals in transport planning should be avoided • by territorial impact assessment of cross-border projects • by co-ordination of policies of geographically adjacent countries • Identification of benefits and costs of projects arising in countries, which are not directly involved in deciding the project is necessary • Improve the clarity with which transport policy is communicated • Agreement on the relative use of pricing/regulation and infrastructure policy has to be made

28. Conclusions • Transport policies have only small effects compared to macro trends • Large increases in regional accessibility transform into small changes in regional economic activity • Regions in the periphery especially with underdeveloped transport and ICT networks are most positively affected by investments in infrastructure • Past and future transport infrastructure policies show a positive tendency in the impact on cohesion in EU-27 • Uniform pricing policies have a slightly negative impact on cohesion in EU-27 • Future EU transport investments have a relatively small, but negative impact on polycentrality in EU-15 and the 12 accession countries • ICT policies can have a considerable effect on spatial development depending on the way of implementation (balanced vs concentrated)

29. Conclusions and recommendations • Infrastructure policies tend toward a positive effect for cohesion in Europe, so a complete re-orientation is not necessary • TEN policy shows a tendency to strengthen congested central regions that are threatened by congestion due to capacity constraints and missing pricing mechanisms • In countries with spatial inequality problems, infrastructure development reinforces rather than mitigates the tendency of polarised economic development, especially in the accession countries • Accession countries should strengthen their secondary networks, so that their peripheral regions gain from the more rapid growth in their agglomerated centres • Transport policies in peripheral regions may weaken agglomeration advantages, whereas ICT policies are supposed to be generally growth enhancing and improve peripheral access to information and communication

30. Conclusions and recommendations • SMCP is in tendency unfavourable of peripheral regions and negative with respect to our cohesion measures, even though some caveats have to be made • But: SMCP is most attractive means of managing undesirable external environmental effects • SMCP should be accompanied by a compensation scheme for those regions that definitely suffer from losses

31. Conclusions and recommendations • Strengthening secondary networks as well as environmental/pricing policies lies in the responsibility of national and regional authorities • Shift of responsibilities for infrastructure to higher authorities is not recommended, because of interactions with other policy fields, in which subsidiarity is still predominant • Better communication between EU, national and regional authorities is recommended being aware of the conflicts that were analysed

32. Future research questions (1) • Can we identify a stable impact of transport and ICT policies on GDP and economic welfare? • Are there network effects, i.e. is the impact of large policy programmes greater than the sum of the impacts of the development of individual links? • Are GDP per capita or GDP based indicators such as equivalent variation sufficient as measures of regional well-being, or should more meaningful indicators of quality of life be included in the analysis? • How do we measure the contribution of transport and ICT policies to polycentricity? • What is the trade-off between scale economies of concentration and lower transport costs encouraging dispersion? • Do lower transport costs always encourage dispersion, is there an optimum level of transport or transport intensity in the economy?

33. Future research questions (2) • At what spatial level should polycentricity be assessed, and how can the conflicts between polycentricity at different levels be resolved? • How have results on pricing policies to be modified, if redistribution of revenues is taken account of? • What is the appropriate institutional structure to ensure the efficient delivery of transport and ICT policy consistent with the needs of EU spatial policy? • How much government at which level? • How can policy be communicated between different levels of decision making?

34. Networking • Close contact with other ESPON projects especially through mutual participation of project partners, close contact with ESPON 1.1.1, 1.2.1, 1.2.2 and 3.1 • Results of other studies in FP4 and 5 have been taken account of, especially IASON, TEN-ASSESS and TEN-STAC • Division of labour into 6 work packages • 3 partners for modelling • 2 partners for the analysis with respect to policy goals • 2 partners for dealing with transport flows and policy interaction